Mayer Brown: COVID-19 Impact on Insurtech: Considerations for Insurtech Companies, Their Investors and Traditional Insurers
Executive summary :
Acceleration of Existing Trends
While the COVID-19 crisis has many insurtech players reconsidering their short-term needs and long- term strategies, what has not changed is the insurance industry’s upward digitisation trajectory. In fact, COVID-19 and its impacts are accelerating the implementation of new mobile apps and other online platforms to meet consumer needs.
COVID-19 has fuelled certain trends that have been developing in the insurance industry over the past decade, including:
- Online self-directed purchases of insurance and streamlined binding and issuance of insurance policies through digital platforms;
- Expanded use of digital distribution channels and electronic delivery of documents and other communications;
- Increased data collection and analytics; and
- Faster “paperless” claim processing.
The COVID-19 pandemic has posed particular challenges for state insurance regulators. Consumer dissatisfaction, whether expressed or simply feared, has caused regulators to issue varying degrees of guidance.
In a strange twist of fate, regulators that historically would have balked at premium rebates are encouraging, and even ordering, return of premium on insurance products whose risk profile has changed dramatically due to the pandemic. As consumers struggle to acquire insurance through traditional channels and carriers struggle to manage claims in a virtual environment, regulators may be persuaded going forward to work more collaboratively with the industry to advance certain technologies.
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